Clinton Proposal to Increase IMP Resources Passes First Hurdle

By Art PineLos Angeles TimesWASHINGTON

President Clinton's controversial bill to increase the resources of the
International Monetary Fund cleared its first - and easiest - congressional
hurdle Thursday, but strategists said the measure still faced an uphill
fight on the House floor and in the Senate.

In a first-round victory for the administration, the House Banking
Committee overwhelmingly approved a compromise version of the bill that
essentially would pay lip-service to Democrats' concerns about improving
worker rights in countries that receive IMF loans.

The vote was 40-9, with all committee Democrats voting for the bill.
Eight Republicans and Rep. Bernard Sanders of Vermont, Congress' only
independent, opposed the measure.

The bipartisan bill, one of Clinton's top legislative priorities for
this year, now goes to the House Appropriations Committee, which is
expected to attach it to a must-pass money bill later this month. But
conservatives may seek to hold the legislation hostage in a battle over
anti-abortion provisions in another bill, one approving foreign aid for
1999.

Clinton has cited the IMF legislation as crucial, both to help deal
with the Asian financial crisis and to maintain U.S. economic leadership
around the world. The IMF, with 182 countries as members, is coordinating
the global rescue effort for Asia.

The bill would provide $18 billion in lines of credit to the IMF as the
U.S. share of a $90 billion increase in the IMF's overall financial
resources.

The money is not used until the IMF decides to tap the U.S. credits,
and the organization pays market interest rates on the portion of the money
it uses.

Although the IMF does not need the increase immediately, officials say
it might - and quickly - if the Asian crisis worsens. IMF authorities also
want to assure the financial markets that the organization has enough
resources on hand if it needs them.

Besides the money, the measure would establish an advisory panel with
representatives from labor, agriculture and private charities to consult
with the Treasury Department on U.S. policy toward the IMF.

It also would require the U.S. representative to the IMF to push
aggressively for policies that pressure borrowing countries to foster labor
rights and force banks to shoulder more of the burden when their loans to
developing countries turn sour.

The legislation was crafted by Republican chairman, Rep. James A. Leach
of Iowa, and Rep. John J. LaFalce of New York.

The committee action came as the IMF and Indonesia continued to wrangle
over that country's efforts to overhaul its domestic economy, and amid
increasing concern that the IMF won't agree to provide more money unless
Jakarta makes more of the reforms it has promised.

IMF officials disclosed Thursday that the organization's hierarchy
already has postponed a March 15 target date for Indonesia to receive a
second $3 billion installment of its $10.1 billion loan package - if only
because of procedural delays.

Although the IMF has made no decision on whether to disburse the second
$3 billion, officials said the turnover among top officials of the
Indonesian government as a result of elections last Sunday has made it
difficult to nail down future policy objectives.